Friday, April 15, 2011

Moving in for the kill

Bank ends interest-only mortgages without documentary evidence

Britain’s biggest mortgage lender has announced the end of interest-only mortgages without documentary evidence of how the loan is going to be repaid.

Posted by mark @ 02:41 PM (2933 views)
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20 thoughts on “Moving in for the kill

  • Will estate agents now be forced to re-calulate the lending criteria to house price ratio? Will many millions of current owners will be refused re-mortgages?

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  • sibley's b'stard child says:

    That’s rather ironic, perhaps the FSA will get their way MMR or no MMR. Despite them trying to distance themselves from the knock-on effects ‘please don’t implement anything just yet; these are just proposals’ it appears that’s exactly what a number of lenders are doing anyway.

    One can only imagine the phone-call between Shapps and Sants.

    Still, nice to see Common Sense getting dusted-off and having a little run around; do it some good.

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  • Smell the fear.

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  • Well indeed Sibbers. It does smack of bolting the stable door late. Interesting that of course the banks contine to refuse to take responsibility for the problem they created – I.e. liar loans.

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  • whatever next….perhaps they will impose other draconian measures like proing you income

    surely that’s against my human rights?

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  • Just heard today that I’ve been turned down for a storecard. Quite incredible, just shows how useless credit rating companies are. I have a good income, savings with private banking in 3 countries and no debt whatsoever-which is maybe the problem. Maybe they would prefer to issue cards to my neighbours who are up to their ears in mortgage and credit card debt. Bet that wouldn’t have happened a few years ago.

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  • Absolutely A Saver – I was shocked a couple of years back to discover how poor my credit rating was. Turns out I had been stupid enough to have never had a loan before, was in a stable job with reasonable income and had not overstretched myself to a buy a property I couldn’t afford. All this was different to the previous tenants in our rented place who were in debt to Barclaycard and others to the tune of thousands and being threatened with legal action (I know that becuase we started opening post that wasn’t addressed to us after bailiffs started turning up).

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  • Good for them, should have been done a decade ago though. Will be interesting to see if others follow suit.

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  • rantnrave,

    A common ploy of debtors in rented digs is to pretend they’ve moved away – terminate the tenancy and start a fresh one in a friend’s name at the same address.

    The credit agencies are wise to this, and if they can’t detect a new address for the debtor will assume they havn’t moved. This can make credit difficult for a new tenant if the previous one had debts and hasn’t re-surfaced.

    When looking over a property that’s to let, it’s as well to glance through the pile of mail on the mat…

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  • sibley's b'stard child says:

    Hmm, I wasn’t aware of that UT. Just as well I spent the first year of my tenancy ringing around various debt-collection agencies ‘hi, just to inform you while I live at this address I can confirm I am not Mrs Olanlege’.

    A Saver, sounds like you’re not a very good debt consumer; you should really work on that and take out a loan or something.

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  • UT i was under the impression ratings are for name of person only not the address.

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  • “UT i was under the impression ratings are for name of person only not the address.”

    An old friend of mine does system maintenance for one of the biggest, and he tells me that they hold a whole sheaf of data on people. Some of their data sources are also of doubtful legitimacy.

    Too many people have the same or similar names to keep track without referencing addresses as well as names.

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  • @ 5 & 6, saver/rantnrv,
    i know someone who is financially independent, & is looking to buy a home without mortgage, who applied for a savings account with Northern Rock (during the government guarantee for depositors), with the intention of using it for his str funds. He was astonished to find he was turned down!

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  • ” i was under the impression ratings are for name of person only not the address”

    Some years ago I was refused an interest free credit deal on a large purchase even though I had very little debt other than a mortgage.

    When I queried this, I was told that my son who was at uni at the time, had run up a sizeable credit card debt and, as he was using our address rather than the address of the student let he was sharing, my credit rating was affected.

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  • mark wadsworth says:

    I must confess I did accept the offer of a store card recently because if you used the card they gave you ten per cent off (£18 in this instance).

    She rang it up in the till and I proffered my debit card as usual and she told me I have to wait until they send me a statement. This duly arrived a week later and then I had to faff about for fifteen minutes on their bl–dy website working out how to repay it (in the end I paid it using debit card over mobile phone) and that was the end of that. I’ve not used it since, of course.

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  • The truth is that Halifax are probably running out of money to lend out. The end of the SLS is probably partly to blame. If I was a lender with very little money then I too would ban interest only mortgages. Makes perfect sense. This reduced lending is another ‘hidden’ indicator that house prices are going fall even further. People with cash are going to bargain much harder for a good deal.

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  • 14. mark wadsworth

    If you want an education on masterful criminality, do business some with the best.

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  • 15. miken

    You got it. Just goes to show how much money was sloshing around back in the day.

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  • @miken

    I doubt that’s true unfortunately. One of the primary reasons the government has played keepy uppy with house prices is that the banks can’t afford to acknowledge that housing assets are overpriced.

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  • @ When a mars bar costs a fiver, an average house price at 200k doesn’t look unreasonable, I think that is where we are heading. Inflation runs on, pay rises increase enough to appease and confuse, food and energy prices blamed on externals, and house prices don’t really fall. In terms of stirling.

    UK emerges more salary competative after years of slowly declining expectations, that are seen as a consequence of the changing world we live in (and in fact are). In some ways it is what we need to do, transition with minimal protest. My issue is that we are still paying employees of the banks large sums of money – that aspect is rediculous and corrupt

    If you are a saver make sure you are saving the correct currency and that isn’t stirling in fact it isn’t any paper. – I only keep my debts in stirling.

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